Long-term Debt, Short-term Borrowings and Finance Lease Obligations (Tables)

3 Months Ended

Mar. 31, 2022

The carrying amounts and estimated fair values of our long-term debt, net of debt acquisition costs, at March 31, 2022 and December 31, 2021 were as follows (in millions):


	March 31, 2022				December 31, 2021
	Carrying Value		Estimated Fair Value(2)		Carrying Value		Estimated Fair Value(2)
Public Debt
Fixed rate special facility bonds, due through 2036	$	42	$	44	$	42	$	45
Fixed rate enhanced equipment notes:
2019-1 Series AA, due through 2032	532		398		532		442
2019-1 Series A, due through 2028	166		141		166		150
2019-1 Series B, due through 2027	95		113		94		121
2020-1 Series A, due through 2032	587		566		587		634
2020-1 Series B, due through 2028	153		183		153		199
Non-Public Debt
Fixed rate enhanced equipment notes, due through 2023	66		65		88		88
Fixed rate equipment notes, due through 2028	575		519		620		706
Floating rate equipment notes, due through 2028	89		83		103		99
2020 sale-leaseback transactions, due through 2024	346		358		347		374
Unsecured CARES Act Payroll Support Program loan, due through 2030	259		188		259		219
Unsecured Consolidated Appropriations Act Payroll Support Program Extension loan, due through 2031	144		104		144		121
Unsecured American Rescue Plan Act of 2021 Payroll Support loan, due through 2031	132		95		132		111
0.50% convertible senior notes due 2026	737		628		736		673
Total(1)	$	3,923	$	3,485	$	4,003	$	3,982

(1) Total excludes finance lease obligations of $3 million and $3 million at March 31, 2022 and December 31, 2021, respectively.

(2) The estimated fair values of our publicly held long-term debt are classified as Level 2 in the fair value hierarchy. The fair value of our non-public debt are estimated using a discounted cash flow analysis based on our borrowing rates for instruments with similar terms and therefore classified as Level 3 in the fair value hierarchy. Refer to Note 7 to our condensed consolidated financial statements for an explanation of the fair value hierarchy structure.

We have financed certain aircraft with Enhanced Equipment Trust Certificates, or EETCs. One of the benefits of this structure is being able to finance several aircraft at one time, rather than individually. The structure of EETC financing is that we create pass-through trusts in order to issue pass-through certificates. The proceeds from the issuance of these certificates are then used to purchase equipment notes, which are issued by us and are secured by our aircraft. These trusts meet the definition of a variable interest entity, or VIE, as defined in Topic 810, Consolidation of the FASB Codification, and must be considered for consolidation in our financial statements. Our assessment of our EETCs considers both quantitative and qualitative factors including the purpose for which these trusts were established and the nature of the risks in each. The main purpose of the trust structure is to enhance the credit worthiness of our debt obligation through certain bankruptcy protection provisions and liquidity facilities, and also to lower our total borrowing cost. We concluded that we are not the primary beneficiary in these trusts because our involvement in them is limited to principal and interest payments on the related notes, the trusts were not set up to pass along variability created by credit risk to us, and the likelihood of our defaulting on the notes. Therefore, we have not consolidated these trusts in our financial statements.